Forexlive European FX news wrap 20 August – An uneventful session

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Markets:

  • NZD leads, EUR lags on the day
  • European equities mostly flat;
    S&P 500 futures slightly higher
  • US 10-year yields up 10 bps to
    3.875%
  • Gold
    up 0.8% to $2,523.80
  • WTI
    crude up 0.38% to $73.87
  • Bitcoin
    up 1.8% to $60,562

It was
another slow session due to the lack of key economic releases. The sentiment in
the markets remains mostly positive as everyone’s looking forward to Fed Chair
Powell’s speech on Friday expecting a pre-commitment to a rate cut in
September.

In the FX
market, the major pairs are basically flat on the day with the USD remaining on
the backfoot amid the risk-on sentiment. Equities continue to benefit from the
prospects of rate cuts into resilient growth as that should boost economic
activity.

Gold has
been another notable mover in the past few days as it reached a new all-time
high. The Fed’s monetary policy trajectory is one of the main drivers of the
precious metal as it influences real yields.

The recent crude oil
weakness, on the other hand, has been a head-scratcher but I can see the
pricing out of the geopolitical risk premium as the main reason as lots of time has passed
and we haven’t got any Iran retaliation.

Bitcoin should
be another major beneficiary of the easing cycle into resilient growth as it’s
basically digital gold on steroids.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Go to Forexlive

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